Bribes for Nuclear Deal

Corrupt means taint the nuclear deal

The new bribery revelations, a rigged process to import reactors and safety-related concerns must lead to the long-blocked scrutiny of the nuclear deal by Parliament.

Brahma Chellaney
The Hindu, March 23, 2011
The world’s worst nuclear accident since Chernobyl raises troubling questions about India’s plans for a huge expansion of its nuclear power programme through reactor imports. Given its low per-capita energy consumption, India must generate far more electricity to economically advance. So it needs more nuclear-generated power. The real issue thus is safe and cost-competitive nuclear power.

What is disconcerting about India’s plans for massive imports is that they are not part of a well-thought-out strategy but a quid pro quo to the United States, France and Russia for bringing the Indo-U.S. civil nuclear deal to fruition, including through a Nuclear Suppliers Group waiver. For example, while keeping Parliament in the dark, the government faxed a letter to U.S. Undersecretary of State William Burns on September 10, 2008 — just hours before the White House sent the deal to the U.S. Congress for ratification — committing India to import a minimum of 10,000MW of nuclear-generating capacity from the United States. New nuclear plans had to be prepared to accommodate the political commitments already made.

As the WikiLeaks’ revelations published by The Hindu underscore, the U.S. has a big stake in the nuclear deal and went to unusual lengths to drum up support in India and ensure the outcome it desired. And although the deal is loaded with largely one-sided and irrevocable conditions for India, Prime Minister Manmohan Singh staked his premiership on getting the deal through.

The Wikileaks’ disclosures over the cash-for-votes scandal during the consummation process only confirm the role mucky money played in lubricating the deal. Now big money is influencing the opaque contract making.

Those who pushed the deal through without building national consensus or permitting parliamentary scrutiny now seem too invested in this deal to objectively gauge long-term safety or the cost competitiveness of reactor imports. One indication of this is the unabashed manner in which a nuclear park has been exclusively reserved — without any competitive-bidding process — for each of the four preferred foreign vendors. Yet after Fukushima, several major safety concerns stand out:

■India is committed to importing reactor models that are yet to be operated in any country, including state-owned Areva’s 1630MW European Pressurized Reactor (EPR) and the General Electric-Hitachi’s 1520MW Economic Simplified Boiling Water Reactor (ESBWR), which is still to receive the final U.S. design certification.

There is no justification for importing untried reactor models. In the 1960s, GE sold India the first two prototypes of its Boiling Water Reactor (BWR), whose designs it later supplied for all six reactors at the now-crippled Fukushima Daiichi plant. India had little option then because nuclear power was relatively new. The GE-built Tarapur plant faced important operating and safety issues, in part because the Americans cut off supply of even safety-related replacement parts in response to the Pokharan I test. Today the rush to buy untried foreign-reactor technology is simply indefensible.

It is only after the Fukushima nuclear crisis unfolded that India’s nuclear chief belatedly acknowledged the need for an earthquake- and tsunami-related safety evaluation of Areva’s EPR design. Why wasn’t this done before committing India to buy the EPR prototype?

■The drive to build energy “security” by importing foreign fuel-dependent reactors — that too without transparency, open bidding and public accountability — is nothing but a money-spending boondoggle, with the potential to generate hundreds of millions of dollars in kickbacks for the corrupt.

In an openly manipulated process, price negotiations are taking place only after each of the four chosen foreign vendors has been gifted an exclusive seaside nuclear park to build reactors. What bargaining power are the authorities left with when they have already reserved each park for a particular firm?

■With the rise of the corporate nuclear lobby, the line between the seller and the buyer has blurred. The nuclear deal was pushed through by the Prime Minister’s Office with the aid of some serving and retired nuclear officials, private-sector companies attracted to nuclear business, and interested foreign governments and vendors. The very entities and consultants that are set to reap major commercial gains helped build the dubious case for massive reactor imports by India.

Now an incestuous and unethical relationship exists between the buyer and seller, underscored by the moves to place initial import contracts worth more than $10 billion without any competitive bidding. It may require the Supreme Court’s intervention to stop this brazen cronyism, or else a 2G-style scam would likely unfold, but with long-term safety ramifications.

■To compound matters, the line between the regulator and the operator has also blurred. And the secrecy enveloping the nuclear military programme has unwarrantably been extended to a purely commercial sector — nuclear power.

Structurally, the national regulator, the Atomic Energy Regulatory Board, is in no position to act independently because, like the operator, it is under the Department of Atomic Energy. More worrying, however, is the manner in which the Board has become the handmaiden of the political agenda set in New Delhi.

Before embarking on a major expansion of its program, shouldn’t India first create a strong, truly independent nuclear regulator?

■Worse still, the planned import of four different types of new Light Water Reactor (LWR) technology will make India’s nuclear-power complex the most diverse in the world. Technological diversity may be good to obviate reliance on one supplier. But the wide-ranging diversity India is getting into will make its safety responsibilities extremely arduous and complex, given the multiplicity of reactor designs it already has in place.

It takes a long time to create teams of experienced safety engineers for any reactor model. But when a particular reactor model is still not in operation anywhere, training of engineers cannot even begin. By contrast, India has immense experience in building, operating and safeguarding indigenous CANDU-style reactors.

■The chain of incidents engulfing all six Fukushima Daiichi reactors was triggered by their close proximity to each other. With a flareup at one reactor affecting systems at another, Japan ended up with serial blasts, fires, spent-fuel exposures, and other radiation leaks.

This seriously calls into question India’s decision to approve the construction of six and more large reactors at each new nuclear park. The plans to build clusters of reactors must now be abandoned.

■At Fukushima, the spent-fuel rods — holding most of the highly radioactive uranium at the site — have proved a bigger radiation problem than the reactor cores. This shines a spotlight on the spent-fuel challenges at the sister but older plant in Tarapur, where the discharged fuel has been accumulating for over four decades because the U.S. has refused to either take it or allow India to reprocess it.

The mounting Tarapur spent-fuel stockpile poses greater safety and environmental hazards than probably at any other plant in the world. The spent-fuel rods — unlike the reactors — have no containment structure, and they endanger public safety in India’s densely-populated commercial heartland.

The spent-fuel bundles are kept under water in bays at a special facility at Tarapur. But such temporary pools have proven Fukushima’s Achilles heel.

The cost to move the spent-fuel rods in secure dry casks to a faraway desert area will be prohibitive. India already has borne high storage costs at Tarapur. Those costs should not only be billed to Washington, but India must exert pressure on America to agree to the immediate spent-fuel reprocessing under international safeguards — the only viable option to contain the risks.

■India’s nuclear accident-liability legislation has seriously burdened the Indian taxpayer by capping the liability of foreign suppliers at a modest level. With the foreign vendors also freed from the task of producing electricity at marketable rates, the taxpayer is to subsidize the high-priced electricity generated. For the foreign vendors, there is no downside risk; only profits to reap. Yet GE and Westinghouse are unhappy with the state operator’s right of recourse.

The legislation was passed after the BJP — a party too compromised to be able to withstand pressures — cut a deal with the government. But after Fukushima, it is important to tighten some provisions of the legislation, which goes beyond U.S. law to channel both economic liability and legal liability to the state and abridge victims’ legal rights.

More broadly, before signing multibillion-dollar contracts, India must first formulate a coherent nuclear-power policy that also addresses safety issues. After all, Dr. Singh is seeking to take India from a largely indigenous capacity to a predominantly import-based programme by implicitly jettisoning Dr. Homi Bhabha’s vision and strategy. Not only is the goal of a self-reliant thorium fuel cycle now pie in the sky, but India is also set to become dependent on foreign suppliers even for critical safety-related replacement parts.

Actually, the corrupt means employed in engineering the nuclear deal must now lead to its long-blocked scrutiny by Parliament. A larger question haunting the country is whether it has institutionally become too corrupt to be able to effectively uphold nuclear safety in the long run — a concern reinforced by the troubled state of internal security, high incidence of terrorism and politicization of the nuclear establishment.